New York's Wealthiest Need to Sacrifice a Little Too

New York is suffering a fiscal crisis as a direct result of greedy financial institutions. Billionaire financial wizards caused this mess, and it is not too much to ask for them to pitch in a few pennies on the dollar to help clean it up. That is why the Public Employees Federation, many other unions and advocates for education and social services, strongly support the extension of the so-called "millionaires tax."

In the mid-1990s New York, like the rest of the world was in the middle of a fantastic economic expansion. Some thought it would last forever and the revenues generated by Wall Street would never stop flowing. Based on this assumption New York commenced cutting taxes. What a time it was! You could cut taxes and still keep spending at the same level or even increase it.

This expansion, as it turned out, was not real. It was based on one financial scheme after another: first the tech bubble, then WorldCom and Enron and finally the housing bubble. Now we are finally dealing with the decisions made in the mid-1990s based on those faulty assumptions. New York gave away billions in tax revenues thinking the party would never end. According to the Fiscal Policy Institute, if we had the same tax structure now that we had in the mid-1990s, we would have an additional $13.5 billion in revenues. Instead of talking about our devastating fiscal crisis we would be asking, what can we do with the surplus?

New York's leaders have stated their plans for how to deal with this new reality. They talk a lot about "sharing the pain" in Albany these days. Unfortunately, there is a definitional problem because apparently sharing doesn’t mean what I thought it did. The governor has proposed a budgetthat cuts spending for state agencies by 10 percent. He has threatened my members with thousands of layoffs unless we make concessions worth hundreds of millions of dollars. Yet wealthy New Yorkers are going to realize a tax cut on Jan. 1. Either it pains the wealthy to get tax cuts or there is no sharing of the pain here.

While the leaders wrestle with how a tax cut equals pain the voters are not so confused. When asked if the tax on those making more than $200,000 should be allowed to expire at the end of the year almost 65 percent of voters said no.

Unfortunately, for some of our elected officials the will of the voters matters little. Gov. Andrew Cuomo has stated in no uncertain terms that he will not extend the surcharge on the wealthiest New Yorkers. The state Senate leadership has made similar statements. Only the Assembly has stood up against the moneyed interests in New York and passed a bill that, if enacted, would continue the surcharge on the wealthy. The Assembly's tax plan extends the surcharge for only one year and modifies the current surcharge by raising the income levels affected. Extending the existing surcharge would raise $1 billion this fiscal year and $4 billion next year. The Assembly proposal raises $750 million this fiscal year and $3.45 next fiscal year.

So the voters are being ignored. The unions, the students, the advocates for the poor and thousands of others who have protested in Albany are being ignored. Who is it that has the ear of the leaders in Albany? Those who "vote" with large amounts of cash are being heard loud and clear.

New York's wealthiest are joining forces and pitching in not for the betterment of New York but for the fattening of their wallets. Yes New York's greediest are putting up $10 million and more to fight against the rest of us so they can keep their millions and billions.

Well, it must be that New York’s wealthiest are being buried in taxes and need a break. As it turns out that is not the case. Right now, the wealthiest New Yorker’s, the top one percent whose households make more than $633,000 a year, pay 8.4 percent of their income in state and local property taxes. Gov. Cuomo and the State Senate want to cut the top one percent's tax burden to 7.2 percent by allowing New York's top two tax brackets to expire.

If the temporary tax rates were made permanent, New York would be able to balance its budget with a lot less damage to the economy. It would still be able to devote $1 billion a year, starting next year, to helping the people who really need tax relief -- those middle and lower income families being squeezed out of their homes by high property taxes.

New York is a great state and a great place to live and raise a family. Every New Yorker should be willing to do whatever it takes to help us keep New York great. I have said repeatedly that we, the members of the Public Employees Federation, are willing to make sacrifices but we are not willing to be sacrificed. We will do our part but we fully expect that all New Yorkers will do their part too.

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